McDonald's CEO fired over relationship with employee

Published: 04 Nov 2019 | Updated: 04 Nov 2019   

Online Desk

Steve Easterbrook- File Photo

McDonald’s chief executive officer, Steve Easterbrook, has left the fast food giant after violating company policy by engaging in a consensual relationship with an employee, the corporation said on Sunday.


McDonald’s said the British-born former president and chief executive demonstrated poor judgment. The company forbids managers from having romantic relationships with direct or indirect employees, reports the Guardian.

In an email to staff, Easterbrook acknowledged the relationship and said it was a mistake. “Given the values of the company, I agree with the board that it is time for me to move on,” Easterbrook said in the email.

McDonald’s directors voted on Easterbrook’s departure on Friday, after conducting a review. Details of his separation package will be released on Monday in a federal filing, according to a company spokesperson.

According to the Wall Street Journal, Easterbrook’s compensation rose with McDonald’s share price and “peaked in 2017 at a total of $21.8m including $9.1m in incentive-based pay. He received $15.9m in total compensation last year”.

McDonald’s is planning to file its third-quarter earnings report on Tuesday. Two weeks ago, the fast food chain reported a 2% drop in net income for the third quarter as it spent heavily on store re-modelling and expanded its delivery service. The company’s share price has dropped 7.5% since, though it is still up 9.2% for the year.

In a news release on Sunday, the company said the leadership transition was unrelated to the company’s operational or financial performance.

Easterbrook, 52, was born in Watford and joined the company in 1993. He rose to lead the British branch in 2006, then became president of its northern European operation, overseeing 1,800 restaurants.

He left the company in 2011, to become chief executive of Pizza Express and later Wagamama. In June 2013 he joined McDonald’s head office in Illinois as global chief brand officer. He became chief executive in 2015.

A divorced father of three, he also has a seat on the board of Walmart and is a “CEO Champion for Change” for Catalyst, a nonprofit which seeks “to build workplaces that work for women”.

On Sunday, the McDonald’s board of directors named Chris Kempczinski, formerly president of McDonald’s USA, as its new president and chief executive.

Kempczinski joined McDonald’s in 2015. He was responsible for approximately 14,000 restaurants in the US, was instrumental in the development of the strategic plan and oversaw the most comprehensive transformation of the US business in McDonald’s history, Enrique Hernandez, chairman of the board, said in a statement.

“Steve brought me into McDonald’s and he was a patient and helpful mentor,” Kempczinski said of Easterbrook, thanking him for his contributions.

Speaking to the Journal, Kempczinski said: “There isn’t going to be some radical, strategic shift. The plan is working.”
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